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Monday, August 11, 2008

Wall Street's jitters drove deal on We Energies' Oak Creek plant

Fielding calls from folks on Wall Street isn’t in the typical job description for someone working for a conservation group.

Opponents of an Oak Creek power plant reached a deal that will provide money to address environmental issues.

But the calls were about the costliest construction project in state history, the $2.3 billion We Energies power plant being built in Oak Creek.

Jittery stock analysts visited with representatives of Clean Wisconsin in Madison this spring, wanting to know whether its eight-year dispute over the building of a coal-fired generating plant could be resolved.

Those jitters were restraining the company’s stock price and were a key driver behind the settlement reached between We Energies and environmental groups. A deal was reached just hours before utility executives were scheduled to field questions from analysts about the plant’s status.

The settlement ended the last piece of litigation, which was being fought over the power plant’s cooling system. It not only removed hurdles to the plant’s opening, it also meant costly cooling towers wouldn’t have to be built.

Clean Wisconsin and the Sierra Club, in turn, won utility company commitments on a couple of high-profile environmental issues — the Great Lakes and global warming.

Although the deal was in the works for six months, it didn’t get done until utility executives faced their quarterly conference call with investors.

“They were clear they wanted to settle this thing before that analyst call,” said Katie Nekola, energy program director at Clean Wisconsin.

“We wanted to communicate that certainty could be accomplished. That is very true,” said Barry McNulty, We Energies spokesman.